HOW LONG IS A PIECE OF STRING? Television budget allocations – the never-ending debate

By - CTL
March 1, 2017
1

by Dorothy Thompson.

It seems everyone today is looking to get more blood out of the proverbial stone than ever before. The economic restraints placed on local offices are being squeezed tighter and tighter by their international masters.

The most frequently asked question from all our clients is: “How much is enough?” That is; what is needed (in money terms) to produce a decent, well-made television commercial that fits the image and corporate imperatives of our brand?

Unfortunately in all my years in this business I have never found one simple or easily articulated response that fits every situation. I suppose that is because every commercial ever made and the circumstances under which they were created were different. Sure on paper briefs might look the same but even one for the same brand to the same market promoting the same benefits will result in a different commercial the next time around. I think the quote “Oils ain’t Oils” from the famous Castrol TVC is most apt.

There are however, certain considerations that I believe will help you navigate and understand the pre-production labyrinth.

Let’s for arguments sake say you have briefed your agency to make a commercial the budget for which is $300,000. Not an inconsiderable sum and one on which the success of your career will no doubt be judged.

Your first question should be: “Is this enough money to produce the kind of commercial that my brand needs to reflect its standing in the marketplace?”

Generally speaking a wander back through the past year’s budgets can certainly be of assistance. But obviously you should also take into consideration the following:

  • Are the creative execution and storytelling required in your brief the same or similar to previous executions or have the goalposts moved so far as to make historical precedents irrelevant?

For the purpose of this exercise let us assume that the budget is adequate for the task at hand and is what the project warrants and indeed can afford, we can proceed to briefing our advertising agency and requesting that they develop a new script for the current market needs and demands.

It is true to say that the relationship that exists between most clients and their agencies has different priorities. The agency is committed
 to making beautiful commercials and as such believes that they truly know who is best to shoot and direct their creative work. Their view is “this is why we are here”, and furthermore  “most marketers have very little knowledge of the creative process”. This in certain circumstances may be true but if you are a client who has worked in the business for many years and made lots of commercials that have worked it’s hard to understand how a new junior creative team assigned to what is effectively their first project on your brand could know better. In such circumstances collaboration is a wonderful thing and in a perfect world would eliminate most conflicts, however we rarely live in a perfect world.

Remember, a commercial is the public face of your brand and it’s you, the client, who will have to live
with its performance for years to come.

Given that differences are bound to develop between yourself and your agency as we all share different opinions and views, a greater understanding of both parties relative positions would go a long way towards achieving the best possible outcomes which after all should be everyone’s primary agenda.

A FEW EXTRA BOB

A really tricky issue often confronted by clients when asked to approve budgets for commercials is the matter of: “look if we had an extra $30,000 or $40,000 we can get this director who will do a much better job than all the others that we’ve considered and he will better fulfill the brand imperatives.”

It is impossible in my view to evaluate the real effect this additional spend will have as there are no quantifiable parameters to measure it.

On a budget of $300,000 an additional $30-$40,000 is an increase of 10-12%. It would provide an additional hour or two of crew time, possibly 
a little more for the art department, with the balance spent in post-production, which is hardly enough to dramatically change the look and feel of the final film.

Other things to consider are – will this extra money get me a significantly better treatment, director or vision?

  • Will the film look 10% better, and how will I recognize the difference?
  • What if any increase in sales might I expect from spending the additional money?
  • Will this extra spend lead to more time being required to finish my commercial and affect my on air date?
  • Is the extra 10% the only additional cost? Will it affect the treatment, execution and look of your commercial thereby requiring further funds to for completion?

In my opinion the additional investment will make little or no difference to the final commercial.

In the heady world of boffins and academics there exists a formula.

It promotes the concept of “pricing elasticity of demand”. It is recognized as a means to determine the responsiveness of a product or service to a change in price. More precisely, it defines the percentage gain needed in quality to support the increase in price and other determinants affecting demand such as income.

It even has its own complex mathematical equation

%∆ in Qd

%∆ in price

Percentage change in quantity demanded

Percentage change in price

I’m afraid this methodology is all Greek to me. It is, shall I say, well and good in theory and 
may indeed be the subject of great debate and importance in university lecture halls or tutorial groups, but in the real commercial world how it translates to the bottom line of the production of commercials in today’s market is anyone’s guess.

Naturally the extra 30 – 40 grand would also need to provide a greater volume of sales. Measuring such a difference is next to impossible as to do so you would need to produce and air both the $300,000 commercial and the more expensive one.

However, on a budget of $100,000, $30,000 is a big percentage increase and should have a dramatic impact on the production and the expectation of its eventual look and delivery.

Conversely the question should also be asked, if I spent $30,000 less, would it affect the effectiveness and look of my commercial?

The simple answer is yes. You need to spend the right amount to ensure the execution and deliverables are not compromised. There are certain immovable costs associated with putting together a high-end production crew and director that will guarantee the polished and professional result your brand deserves.

It is indeed one of the joys of this amorphous art to be able to say, and this is good advice, “You get what you pay for”.

One thought on “HOW LONG IS A PIECE OF STRING? Television budget allocations – the never-ending debate

  1. Great Article Dorothy
    Thanks

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